Business First Bancshares, Inc. · NASDAQ:BFST
Business First Bancshares — Investor Presentation (April 2018)
30 slides from Business First Bancshares's investor presentation, Apr 9, 2018
Slide 1: Business First Bancshares, Inc. Investor Presentation
BUSINESS FIRST BANK. Go get it. Business First Bancshares, Inc. Investor Presentation Nasdaq: BFST April 2018
Slide 2: Legal Disclosure
Legal Disclosure Note Reaarding Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act o
Slide 3: Legal Disclosure (Cont'd)
Legal Disclosure (Cont'd) No Offer or Solicitation This presentation does not constitute or form part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale w
Slide 4: Overview of Business First Bancshares, Inc.
Overview of Business First Bancshares, Inc. Founded in 2006; headquartered in Baton Rouge, LA Commercial bank focused on small-to- midsize businesses and their owners and employees ~ $1.2bn gross loans; $1.3bn total deposits”) ~ ~23% C&l loans and NIB deposits Currently operating in nine Louisiana m
Slide 5: Our Operating Philosophy Has Been Consistent Since Day One
Our Operating Philosophy Has Been Consistent Since Day 1 Recruiting and Commercial Focus} Retaining Talented Bankers * Small-to-midsize businesses and their owners and employees » Target $1-810mm commercial lending relationships that are typically too small for the larger financial institutions to v
Slide 6: Executive Management Team
Executive Management Team Executive team includes a mix of youth and experience which fosters an energetic and collaborative work environment Geographic diversification amongst executive management team Yearsin Year Started Jude Melville 43 13 2006 Director, President and Chief Executive Officer Gre
Slide 7: Market Presidents
Market Presidents + Business First's Market Presidents have diversified experience at a mix of large, regional and community banks * Market Presidents serve as important conduits between executive management and the local markets Market Market President Age Years in Banking Year Started atBF Prior E
Slide 8: Corporate History
Corporate History 2016: Opened new headquarters in downtown Baton Rouge 2018: 2006: Listed on Bank opened in 2008: 2010: NASDAQ Baton Rouge; Expanded Expanded 2015: 2017: on April 9" expanded into into the into the Acquired American Expanded |} under the Shreveport Lafayette Houma Gateway Financial
Slide 9: Current Footprint
Current Footprint Statewide focus on urban markets Multiple markets provide diversification of both risk and production opportunities East Baton Rouge 2006 Shreveport 2006 Northshore 2007 Lafayette 2008 Lake Charles 2009 Houma 2010 New Orleans 2015 West Baton Rouge 2015 Dallas 2017 Minden 2018 ) 4 1
Slide 10: Recent Financial Results — Strong FY 2017
Recent Financial Results — Strong FY 2017 FY 2017: Strong Organic Growth Total Deposits Loan growth of 19.2% 1.0000 1.1000 10568 $900.0 ema $0028 Core deposit growth of $137 million, or sor 2000 soi 18.0% aoe sale : seco Core deposit growth essentially bhai S700 matched loan growth for 2H'17 se00 |
Slide 11: Loan Portfolio
Loan Portfolio + Commercial lending is primary focus, with C&l representing 23% and Owner Occupied CRE representing almost 16% » Recent acquisitions have provided portfolio diversification » Energy concentration has decreased from 19.8% of total loans in Q1'15 to 11.4% in Q4'17 + Average funded loan
Slide 12: Detailed Loan Composition
Detailed Loan Composition * Owner - Occupied CRE makes up 53% of total CRE lending ~ C&D and Total CRE concentrations of 120% and 263%, respectively CRE CaaS waans PIS CRE Composition - Ouner Occpied 143% 148% soe sae 18.1% ‘onal me i a ca Fis me tO arta pcecosmacacipnes = =o = o_o = Prestineianics
Slide 13: Loan Production
Loan Production New & Renewed Commitments $780 + Business First loans have grown at 20.1% CAGR: from 2014-2017 — Since closing, the American Gateway portfolio has $695.5 decreased from $143 million to $48 million $600.0 $60.0 + Increased production in 2017 primarily driven by: — New lending teams hi
Slide 14: Strong Credit Performance
Strong Credit Performance Credit quality metrics have improved significantly since NPLs / Gross Loans 2010 4.00% 3.56% FY 2017 NCOs resulted from two previously identified, substandard energy credits 3.00% 2.45% — $2.7 million in charge-offs from these two credits 2.00% 1.76% — Balance of the portfo
Slide 15: Strong Credit Performance
Strong Credit Performance * Classified Assets have decreased by 59% from $45.5 million at Q4’10 to $18.8 million at Q4’17 750% 07% eo0% * Past due loans have remained low even with the acquisition of American Gateway and stress in the 50% energy sector in recent years 00% oo Sie 180% * Beginning in
Slide 16: Energy Lending
Energy Lending * Energy loans accounted for approximately 11.4% of ENERGY PORTFOLIO BY COLLATERAL portfolio and 90.2% of bank-level capital as of December 31, 2017 © wor eneray ICOLLATERAL Total $5 “porttolio [Accounts Recewvable & Inventory | $ 23.1 173% * Geographic, loan type and collateral diver
Slide 17: Energy Lending — Historical Performance
Energy Lending — Historical Performance » Continued stability of Watch List as economic conditions for the energy sector shows incremental improvement Q115 @215 Q315 415 «QI16 «= Q216 —Q3'16 4416 —«QI17 = «217, «317417 — 3 lee y GRs) Gauls! ares, ek Swami! Tan's) Mims 4 vainig Sus) slants) Bare leon
Slide 18: Deposit Mix
Deposit Mix * Business First's deposit gathering strategy is focused on its commercial lending relationships ~ In Q2’46, established a relationship pricing model that values deposits and treasury management ~ Recently added an incentive plan for lenders tied to deposit growth ~ Alll but one of the T
Slide 19: Yield / Rate Analysis
Yield / Rate Analysis - Balance Sheetis asset sensitive 6.00% =e] 5.45% 5.34 Par sore pd bss Pal m ex 5.00% 4.83% & aca 474 459%" la.34' + Stable core NIM“ 4.04% 4.04% | 4.00% 81 , 3.78% 82% | 3.875 — 3.69% 63s Namen | aso ae Bee crx 3.65% Sand 2.65% 365% BE 3.00% ao 3.05% * Fixed vs. Variable rate
Slide 20: Interest Rate Positioning / Securities Portfolio
Interest Rate Positioning / Securities Portfolio Interest Rate Sensitivity” 4.0% 3.0% 2.0% 1.5% 1.3% 1.0% 0.3% i | 0.0% i) = “10% 0.1% i -2.0% 3.0% -3.0% 2.5% -2.2% 4.0% 3.5% +300 +200 +100 -100 8% Change in Net Interest Income |% Change in Econamic Value of Equity Business First Securities Portfoli
Slide 21: Update on Minden Bancorp Transaction
Update on Minden Bancorp Transaction * Acquired Minden Bancorp, Inc. (MBL Bank) on January 1, 2018 ~ Allcash transaction valued at $76.0mm ~ $323mm in total assets; 1.72% ROAA in FY 2017 * Closed transaction in under 3 months + Systems conversion planned for July 15, 2018 + Transactional Rationale v
Slide 22: Growth Strategy Going Forward
Growth Strategy Going Forward Identify and Recruit Talented Bankers ned Focus on Business Model Expanding Presence in Existing Markets Disciplined Acquisition Strategy » Talented commercial bankers will be the primary catalyst for future growth in existing or new markets » Bankers are attracted to B
Slide 23: Appendix
Appendix
Slide 24: Historical Financial Summary
Historical Financial Summary Forthe Year Ended Decenber 31, 2011 2012 2013 2014 2015 2016. 2017 Intemaly F Initial Expansion Balance Sheet & Capital Total deseis S657142$652261$881.062 = S848 SoASTZ—SHO7E.OED—SH.tOS.Re $1,001,288 Gnss Loans 404560 44,656 460236 525045 558,386 772382 211,131 975,485
Slide 25: Energy Portfolio by Total Past Due — As of December 31, 2017
Energy Portfolio by Total Past Due —As of December 31, 2017 ist Due Energy Loans by Category and Collateral er Totals's | “0FEneray | TotalPast %ofEnergy | Accruing-Past Due Non- Portfolio Due $ Portfolio | 30-59 60-89 Accruals Upstream 177 13.3% 16 12% = = 16 Midstream 25.5 19.1% - - - - - Downstre
Slide 26: Energy Portfolio by Risk Rating - As of December 31, 2017
Energy Portfolio by Risk Rating - As of December 31, 2017 Energy Loans by Risk Rating and Categ: ‘Support! 1218112017 9/80/2017 RISK RATING RR# | Upstream | Midstream ‘Downstream Service Total$ i%ofEnergy: Total$ {%of Energy cash Secured 1 cr) - 33 0.2 38 27% 45 35% /Superior 2 07 13 os 28 52 30% 62
Slide 27: Energy Portfolio by Risk Rating - As of December 31, 2017
Energy Portfolio by Risk Rating - As of December 31, 2017 Energy Loans by Risk Rating and Collateral pans wee | C81 asta Renestae secu MOM™ raise of Ennay | Totals et Enon [Cash Secured 1 - - - 36 - 36 21% 45 3.5% [Superior 2 08 - 12 09 Fe 5A 3.8% 62 48% JAcceptable 3 212 190 35 - 36 412 35.3% 428 3
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures oT _Forthe YearEnded December 31, 0 ED Tangible Common Equity / Tangible Assets: ‘Tangible Common Equity Total Shareholders’ Equity $ 59,524 $ 66269 $ 71,014 $ 71,923 $ 78845 $ 112449 $ 113559 $ 179.935 ‘Aguustments: Goodwill - - - (2.376) (6.824) (6.824
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures P2014] 2015016 | 2017 Core Net Income: Net income $ 4083 $ 4006 $ 5111 S 4848 Adjustments: Deferred Tax Asset write-down $1,658 MBL Acquisition deal charges, tax effected at 21% $101 AGFC Acquisition deal charges, tax effected at 34% 317 758 187 Core Net
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ‘Quarterly Core NIM Core Netinterest Margin: Netinterest income 3 6168 S$ 8562 S 9916 S$ 9506 S 9431 § 9101 S 9742 § 9318 $ 10560 S 11690 S 10593 S 11589 ‘Adjustments: ‘AGFC loan purchase = (600) __(682)__(679) (454) (254) 325) (330) 1,308) 1.849 (om 545
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